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Three steps for successful commercial space management
Commercial real estate is a major segment of the real estate world. In this lively and competitive field, consistent success depends on having a correct, orderly approach. Three key steps form the basis for effective operations: achieving a data-driven understanding of the present situation, planning methodically, and adjusting the marketing strategy accordingly. Here we discuss what is needed to do it properly.
A hectic marketplace
Experts say that the commercial real estate (CRE) market is recovering from the shock of the COVID-19 pandemic’s peak in 2020. This market is expected to grow globally through the end of the current decade. In 2021 the global real estate market size was already estimated to be larger than three and a half trillion USD, making it a highly attractive business sector. However, this is a high-stakes market, and every decision must be made especially carefully.
Ultimately, successfully managing commercial real estate requires effectively addressing clients’ individual needs. This easily becomes a large-scale challenge because commercial buildings typically house numerous tenants. Naturally, each has different desires and expectations. Many CRE companies hold dozens or even hundreds of properties scattered around different regions or countries. Thus, overseeing large property portfolios means constant multitasking.
Those who are familiar with this industry know how many tasks must be carried out simultaneously. CRE administrators need to be aware of space occupancy, track asset performance, file financial reports, and regularly take care of facility maintenance, renovation, and insurance. When the to-do list is long, it is especially important to properly organize the workflow. How should it be done? Here are the essential steps for successful space management:
1) Situation analysis: rented space can be represented in concrete data, such as rental term duration, total area, price per area unit, total rental cost for the tenant, operating expenses, applicable taxes, insurance figures, and so on. This information holds valuable insights and must be thoroughly analyzed before any action is taken.
For instance, knowing when each rental contract expires is crucial for timely marketing action – otherwise, it is all too easy to forget that certain spaces are no longer rented.
However, business-related data accumulates rapidly and may overwhelm even the trained human eye.
It is even more bewildering when the information is stored in a fragmented manner or is not easily accessible. For example, standard architectural floor plans and sketches include area location, structure, and size, but do not show rental costs or contract expiry dates. Rental contracts and financial reports contain crucial information, but they are not easy to read at a glance. Moreover, one cannot readily use these archive documents in marketing proposals.
One should be able to easily calculate and compare area sizes, prices, occupancy rates, revenue figures, and any other relevant information. Only then data-driven decisions can be made, preparing the ground for the next step.
2) Comprehension and planning: after the needed information was gathered and processed, CRE managers need to set goals accordingly. Clearly visualizing the current state of affairs is vital for sound strategy development. When managers understand what can be expected, they can define the desired results and know how to achieve them.
Any commercial real-estate inventory is a diverse ecosystem with many external and internal factors at play. Among the major factors to consider are demand and supply tendencies, the impact of high inflation, supply chain disruptions, as well as new regulatory requirements, changing tax policies, and the increased demand for corporate compliance with ESG (environmental, social, and governance) criteria.
In such environments, planning should always start with setting general policy goals. Only then these goals should be translated into local ones. Overseeing complex environments requires the planning and control systems to be as simple as possible, to save precious time and avoid distracting, time-consuming, and monotonous tasks.
3) Marketing: Now the chosen strategy can be translated into a concrete updated marketing policy. One can focus the marketing efforts on specific vacant spaces or any other asset needing a performance boost.
Marketing personnel needs reliable tools to quickly retrieve information and present it to potential tenants.
As it is hard to overestimate the importance of learning from past performance, the sequence needs to be repeated regularly: actions should be analyzed, insight-based plans should be made, and a detailed activity schedule should be written. Understandably, doing it efficiently requires professional space management products that are fit for the purpose.
Enhancing Corporate Productivity
Adopting a specialized space management solution can streamline this process and ensure that CRE experts do not get lost in the technical processes and administrative tasks. Here is how it can improve the workflow:
· For the analysis stage, such software provides built-in advanced analytical tools. These are necessary to automatically concentrate the existing information, comprehensively examine it, and present insights in a meaningful way. The system displays information on live dashboards and color-coded property maps, making it easy to see the current situation.
· At the planning stage, relying on facility space management software guarantees information availability. The system was created for advanced real estate planning and intuitive control. It offers an easy-to-read facility overview and allows one to zoom into individual spaces. It can import data from various forms of documentation, calculate costs and actual rented area size, simulate area divisions, and even notify property managers of underused spaces.
A space management platform can automate and simplify the planning routine, cutting tedious work and giving facility administrators the ability to implement the insights they gained from the analyses in the previous step.
· At the marketing stage, dedicated space management software is an indispensable tool as well.
Marketing specialists can use it to search the inventory by any relevant parameter, such as category, designation, size, etc. Having identified a suitable asset, they can work with the software to virtually model area merging and splitting. Then the same program can generate appealing and legible material for marketing proposals.
This way, the space management platform supports all operations required to control a real estate inventory effectively. The system is designed specifically to serve as a comprehensive solution that handles impressive data volumes, facilitates budgeting and policy making, and makes marketing smoother and easier.
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